On September 3, 2009, Amazon.com filed an appeal to the Federal Court in respect of the decision of the Commissioner of Patents to refuse to grant a patent pursuant to Canadian Patent Application No. 2,246,933 (the '933 Application).

The '933 Application involved the use of "cookies" (which save an IP address and personal information) to allow an Internet shopper to click just once to purchase an item of interest. Amazon.com claimed that their cookies were a new and non-obvious method to hasten and simplify online ordering. The Examiner had initially rejected the application on the grounds that the claimed invention was obvious (and therefore not inventive) and also that the application sought to patent unpatentable subject matter.

This rejection was appealed to the Canada Patent Appeal Board (the Board). On March 5, 2009, the Board issued a surprising decision. While the Board found that the claimed invention was not obvious, the Board rejected the application, stating that: "concepts or rules for the more efficient conduct of online ordering, are methods of doing business. Even if these concepts or rules are novel, ingenious and useful, they are still unpatentable because they are business methods."

The Board concluded that subject matter that is not "technological" is non-statutory subject matter. Amazon.com's invention, in substance, was not considered technological in nature and did not bestow a technological advantage, and the form of the claims was directed to a method for the purchase of goods, which is non-statutory subject matter.

The Board held that in order for an "art" or "process" to be patentable, it must "cause a change in the character or condition of some physical object". According to the Board, the one-click invention merely confers a change to the ordering process rather than a change to the products offered for sale.

Not surprisingly, Amazon.com's appeal to the Federal Court alleges that the Board erred in making these determinations. The Federal Court's decision in this matter will have a significant effect on patent practice in Canada. In the meantime, however, it is interesting to note that the current Manual of Patent Office Practice (MOPOP) does not specifically deny patent protection for business methods.

That said, proposed revisions to the MOPOP regarding subject matter and utility closely follow the reasoning of the Board in the Amazon.com case. The proposed revised subsection 12.04.01 states that the "examination of claims is performed from the perspective of both form and substance, and the requirement that an invention relate to a field of technology may, as appropriate, be evaluated in respect of both the form and substance of a claim." "Technology" is defined as "the application of scientific knowledge for practical purposes, especially in industry"; "machinery and equipment developed from scientific knowledge"; and "the branch of knowledge dealing with engineering or applied sciences."

The coming year will be very interesting, as both the Canadian Federal Court and the U.S. Supreme Court address the patentability of business methods.

[For a detailed discussion of the U.S. issues, please see Stikeman Elliott's January 2009 Intellectual Property Update.]